IBM shares fell 3% following the disclosure of the investigation. The company's stock is down 14% over the past year amid slumping hardware sales and the stronger U.S. dollar. Earlier in the day the company rewarded shareholders with a $4 billion increase to its share buyback program.

In the past big tech companies have landed in hot water with European regulators for taking advantage of Ireland's relatively low tax rates. For example, Google(GOOGL) and Apple(AAPL) have been accused of shifting profits between international subsidiaries to dodge taxes.